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Recent developments and trends

Recent developments

Are there any notable recent developments or trends in the aviation sector in your jurisdiction?

There have been several recent legislative amendments concerning the leasing of aircraft. One such amendment concerns how aircraft leases dissolve on default. According to the general lease rules under Maltese law, if a lease agreement contemplates dissolution of the lease in the event that either party fails to perform as promised, the dissolution will take effect only when the defaulting party is notified by a judicial act. Under these rules, a lessor that sought to terminate the lease for non-payment, for example, would have to incur further costs and waste considerable time in order to follow the procedure, all while the aircraft remained in the lessee’s possession. However, this rule was abolished with regard to aircraft leases in 2016. Dissolution now occurs on written notification (including electronic means) – notwithstanding opposition by the lessee – and does not require court authorisation or confirmation that a default event has taken place. In such circumstances, the lessor may, after notice to the lessee, take possession of the ship or aircraft, including an aircraft engine, in accordance with the agreement between the parties. The lessor may ask the Maltese courts for an order authorising or directing these acts, and the courts are bound to render full support to a lessor or mortgagee as quickly as possible.

Further, under the Financial Institutions Act, any financial institution that carries out financial leasing or related transactions, whether established or operating in Malta, must have a licence from the competent authority to undertake such activities in Malta.

Regulatory framework

Domestic law

What is the primary domestic legislation governing the aviation industry in your jurisdiction?

The principal laws governing aviation in Malta are:

  • the Civil Aviation Act, which regulates flight licensing and liability;
  • the Civil Aviation (Air Operators’ Certificates) Act, which regulates the certification of aircraft operators for professional ability and safety; and
  • the Aircraft Registration Act, which regulates the registration of aircraft and covers mortgages and other special privileges to which aircraft may be subject.

EU regulations comprise a body of secondary legislation which concerns:

  • security and safety;
  • passenger rights;
  • airport slots; and
  • antitrust and environmental compliance.

International law

What international aviation agreements has your jurisdiction concluded?

Malta has concluded:

  • the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air;
  • the Chicago Convention on International Civil Aviation;
  • the Chicago International Air Services Transit Agreement;
  • the Tokyo Convention on Offences and Certain Other Acts Committed On Board Aircraft;
  • the Hague Convention for the Suppression of Unlawful Seizure of Aircraft;
  • the Montreal Convention for the Unification of Certain Rules for International Carriage by Air; and
  • the Cape Town Convention on International Interests in Mobile Equipment and the Aircraft Protocol thereto.

Regulatory authorities

Which government bodies regulate the aviation industry and what is the extent of their powers?

The principal regulatory authority is Transport Malta, which operates under the Ministry for Transport, Infrastructure and Capital Projects. Within Transport Malta, the Civil Aviation Directorate (CAD) is tasked with implementing the strategies and objectives of its parent authority. The CAD is responsible for, among other things:

  • aircraft registration;
  • aircraft safety;
  • aircraft and aerodrome operators;
  • air navigation service providers;
  • aeronautical personnel licensing; and
  • the conclusion of international air services agreements.

The CAD also functions as the Maltese advisory body to the European Aviation Safety Agency.

Aviation Security Malta is a secondary regulatory body which is charged with developing, regulating and managing a secure aviation system and ensuring compliance with international standards, among other things.

Air carrier operations

Operating authorisation

What procedural and documentary requirements must air carriers meet in order to operate in your jurisdiction?

Under EU Regulation 1008/2008 on common rules for the operation of air services, air carriers established in the European Union must obtain an operating licence that permits them to provide intra-EU air services, as stated in the operating licence, unless:

  • the services are performed by non-power-driven aircraft or ultralight power-driven aircraft; or
  • the air carrier operates only local flights.

In Malta, licences are issued by the Civil Aviation Directorate (CAD) and regulated by the Civil Aviation (Air Transport Licensing) Regulations.

An air carrier will be granted an operating licence only if:

  • its principal place of business is in Malta;
  • it has a valid air operators certificate from the CAD;
  • it owns or holds one or more aircraft through a dry lease;
  • its main occupation is operating air services in isolation or combined with another commercial operation of aircraft or the repair and maintenance of aircraft;
  • it has a transparent company structure;
  • it is majority owned and controlled by EU member states or nationals;
  • it complies with the various financial requirements;
  • it complies with the various insurance requirements; and
  • it is of good repute and has not been declared bankrupt, as proven by documents or a declaration under oath.

Ownership and control

Do any nationality or other requirements or restrictions apply to ownership or control of air carriers operating in your jurisdiction?

Under EU Regulation 1008/2008, for an air carrier to be granted an operating licence, it must be at least 50% owned and effectively controlled by EU member states or nationals, whether directly or indirectly through one or more intermediate undertakings. Agreements with third countries, to which the European Union is a party, may make exceptions to this obligation.

Financial requirements

What financial thresholds must air carriers meet to obtain operating authorisation?

Under EU Regulation 1008/2008, first-time applicants must demonstrate to the CAD that they can meet:

  • at any time, actual and potential obligations for a 24-month period commencing from the start of operations. In this respect, they must submit a business plan for, at a minimum, their first two years of operation; and
  • fixed and operational costs incurred for operations according to their business plan for a three-month period commencing from the start of operations, without taking into account any income from their operations.

Under the Civil Aviation (Air Transport Licensing) Regulations, applicants must submit:

  • internal management accounts and, if available, audited accounts for the previous financial year;
  • a projected balance sheet, including profit and loss accounts, for the following two years;
  • the basis for projected expenditure and income figures concerning fuel, fares and rates, salaries, maintenance, depreciation, exchange rate fluctuations, airport charges, insurance, traffic and revenue forecasts;
  • details of start-up costs incurred between the submission of their application to the commencement of operations and a proposal to finance this cost;
  • details of existing and projected sources of finance;
  • details of shareholders (including nationalities and the types of share to be held) and the articles of association;
  • projected cash flow statements and liquidity plans for the first two years of operation; and
  • details of the financing of aircraft purchasing and leasing.

Insurance coverage

What is the required level of insurance coverage for air carrier operations?

EU Regulation 785/2004 includes insurance requirements for air carriers and aircraft operators. The amounts are calculated in special drawing rights (SDRs) – which are a weighted average of various convertible currencies and the International Monetary Fund unit of account – and are as follows:

  • Passenger liability – minimum 250,000 SDR per passenger;
  • Baggage liability – minimum 1,131 SDR per passenger;
  • Cargo liability – minimum 19 SDR per kilogram (kg);
  • Third-party liability – this varies according to the aircraft’s maximum take-off mass (MTOM). For aircraft with an MTOM of less than 500 kg, the minimum is 750,000 SDR. For aircraft with an MTOM of 12 to 25 tons (eg, regional jets), the minimum is 80 million SDR. For aircraft with an MTOM of 200 to 500 tons (eg, long-haul jets) the minimum is 500 million SDR.

Safety requirements

What safety requirements apply to air carrier operations, including with regard to professional and technical certifications?

EU Regulation 1008/2008 requires air carriers to obtain an air operators certificate (AOC), which is a prerequisite for receipt of an operating licence under the same regulation. An AOC confirms that the operator is sufficiently professional and organised to ensure the safety of operations as specified in the AOC. An AOC must be issued by the CAD and is regulated by the Civil Aviation (Air Operators Certificates) Act.  

The CAD will grant an AOC only if it is satisfied that the air carrier is competent, with particular regard being given to its:

  • previous conduct and experience;
  • equipment;
  • organisation;
  • staffing;
  • maintenance; and
  • other arrangements to secure the safe operation of its aircraft.

In determining a carrier’s competency to operate aircraft, the CAD will consider whether it can meet the applicable safety requirements according to law. AOCs are valid for one year. Under the Civil Aviation (Air Operators Certificate) Act, CAD decisions can be appealed before the Aviation Safety Board.

In addition to an AOC, air carriers must obtain an airworthiness certificate, which are issued by the CAD as the Maltese advisory body to the European Aviation Safety Agency (EASA). The main legislation in this regard is the EU Regulation on Initial Airworthiness (748/2012) and the EU Regulation on Continuing Airworthiness (1321/2014).

Environmental obligations

What environmental obligations apply to air carrier operations?

As Malta is part of the European Union, the regulation of environmental obligations relating to aviation is divided into two categories:

  • Aircraft noise – the main legislation in this regard is the EU Balanced Approach Regulation (598/2014), which sets out noise-related operating restrictions at EU airports and tasks the EASA with collecting, verifying and publishing noise performance information concerning aircraft which operate at EU airports. The Assessment and Management of Environment Noise Regulations also transpose EU rules, which require Malta to carry out noise mapping and adopt action plans in order to prevent and reduce exposure to noise. The Air Navigation (Noise Certification and Operation of Aircraft) Order grants the CAD the power to issue noise certificates pursuant to Annex 16 of the Chicago Convention on International Civil Aviation.
  • Aircraft emissions – the EU Greenhouse Gas Emissions Trading Scheme for Aviation Regulations transpose EU rules which oblige carriers to participate in the EU Emissions Trading System in relation to flights within EEA airspace. This requires them to monitor their carbon emissions and buy and surrender allowances equivalent to those emissions.

Air traffic control

How are air traffic control services regulated in your jurisdiction?

The CAD regulates air traffic control in accordance with:

  • the Air Navigation Order;
  • the Civil Aviation (Provision of Air Navigation Services) Order;
  • the Civil Aviation (Distribution of Traffic Rights) Regulations; and
  • the Civil Aviation (Air Traffic Flow Management) Regulations.

The CAD has the power to, among other things, licence air traffic controllers and restrict or prohibit flights over Malta.

Routes

Do any licensing requirements apply to specific routes?

An operating licence obtained under EU Regulation 1008/2008 is valid within the European Union, the European Economic Area and Switzerland. For routes outside these areas, permission is required under a bilateral air services agreement. In the absence of such an agreement, commercial air services may be undertaken on a temporary basis at the CAD’s discretion.

Are any public service obligations in place with respect to remote destinations?

No.    

Charter services

Do any special provisions apply to charter services?

No.

Taxes

What taxes apply to the provision of air carrier services?

Under the Income Tax Act, income derived from the leasing or operation of aircraft or aircraft engines which are used for or employed in the international transport of passengers or goods is always deemed to have arisen outside Malta irrespective of:

  • where the aircraft or aircraft engines are registered; and
  • whether the aircraft has called at, or operated from, an airport in Malta.

Therefore, air carriers which are managed and controlled in Malta are taxed on a remittance basis (ie, only on income which is remitted to Malta). However, air carriers incorporated in Malta are taxed on a worldwide basis (ie, they are still taxed on their income at the standard 35% corporate tax rate, even though it is deemed to have arisen outside Malta). Air carriers which are neither incorporated nor managed or controlled in Malta pay no income tax, as their income is deemed to have arisen outside Malta.

Consumer protection and liability

Airfares

Are airfares regulated in your jurisdiction?

Airfares are regulated by the Civil Aviation (Air Fares) Regulations, which distinguish between air carriers of agreement and non-agreement states. ‘Agreement states’ are those which have entered into an agreement with Malta reciprocally granting citizens the right to:

  • enter, remain, reside in and leave the other state;
  • move freely within the other state for such period as may be established in the agreement; and
  • work or establish, provide or receive services in the other state.

Carriers from agreement states can set their own airfares, provided that they inform the general public, on request, of all air fares and standard cargo rates. The Civil Aviation Directorate (CAD) may withdraw a basic fare which is excessively high and stop further decreases in fares resulting in widespread losses among all air carriers.

Carriers from non-agreement states must seek approval of their fares from the CAD.

Passenger protection

What rules and liabilities are air carriers subject to in respect of:

(a) Flight delays and cancellations?

Flight delays and cancellations are regulated by the EU Flight Compensation Regulation (261/2004) and the Denied Boarding (Compensation and Assistance to Air Passengers) Regulations, which largely implement the EU regulation.

Delays Delays which attract liability and obligations are defined under three categories:

  • delays of two hours or more for flights of 1,500 kilometres (km) or less; 
  • delays of three hours or more for intra-EU flights of more than 1,500 km and for all other flights of between 1,500 km and 3,500 km; and
  • delays of four hours or more for all flights not falling under points one or two above.

Where a delay is for five hours or more, the air carrier must offer passengers full reimbursement of their ticket and, when relevant, a return flight to their first point of departure.

Where a delay is for one day or more, the passengers must be offered free hotel accommodation and transport from the airport to the hotel.

In all cases of delay, passengers must be offered free meals and refreshments and two phone calls, text messages or emails.    

Cancellations

In all cases of cancellation, passengers must be offered a choice between:

  • full reimbursement of their ticket and, when relevant, a return flight to their first point of departure;
  • rerouting to their final destination at the earliest opportunity; and
  • rerouting at a later date at the passengers’ convenience, subject to seat availability.

The passengers must also be offered free meals and refreshments and two phone calls, text messages or emails. When the passenger opts for rerouting and this is expected to occur the next day, he or she must be offered free hotel accommodation and transport from the airport to the hotel.

In case of cancellations, the air carrier is liable to pay compensation of:

  • €250 for all flights of 1,500 km or less;
  • €400 for all intra-EU flights of more than 1,500 km and other flights between 1,500 km and 3,500 km; and
  • €600 for all other flights.

The air carrier is exempt if it informs the passengers of the cancellation or proves that the cancellation was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

In case of non-compliance with the above obligations, the Denied Boarding (Compensation and Assistance to Air Passengers) Regulations impose an administrative fine of between €470 and €5,000 on the air carrier.

(b) Oversold flights?

Under EU Regulation 261/2004, an air carrier must first call for volunteers to surrender their seats in exchange for benefits under conditions to be agreed between them and the air carrier. Volunteers must be offered the choice between:

  • full reimbursement of their ticket and, when relevant, a return flight to their first point of departure;
  • rerouting to their final destination at the earliest opportunity; or
  • rerouting at a later date at the volunteers’ convenience, subject to seat availability.

If there are insufficient volunteers, the air carrier may deny boarding to passengers against their will.

The same administrative fines apply as for non-compliance.

(c) Denied boarding?

Under EU Regulation 261/2004, passengers who are denied boarding must be offered the option to choose between reimbursement and rerouting, as is the case for volunteers in case of oversold flights. When a passenger opts for rerouting and this is expected to occur the next day, he or she must be offered free hotel accommodation and transport from the airport to the hotel. The passenger must also be offered free meals and refreshments, as well as two phone calls, text messages or emails.

The same administrative fines apply as for non-compliance.

(d) Access for disabled passengers?

Under EU Regulation 261/2004, air carriers must prioritise persons with reduced mobility and any persons or certified service dogs accompanying them. In case of delays, cancellations or denied boarding, air carriers must pay particular attention to the needs of these persons when it comes to their right of being offered meals and refreshments, hotel accommodation, transport and two phone calls, text messages or emails.

The same administrative fines apply as for non-compliance.

Further, the EU Reduced Mobility Rights Regulation (1107/2006) specifically prohibits air carriers from refusing to accept a reservation or embark a passenger on the grounds of disability or reduced mobility.

(e) Lost, damaged or destroyed luggage?

Malta has ratified the Montreal Convention for the Unification of Certain Rules for International Carriage by Air, under which passengers can claim up to 1,131 special drawing rights (SDR) – which are a weighted average of various convertible currencies and the International Monetary Fund unit of account – in compensation.

(f) Retention and protection of passenger data?

Data retention and protection rules are set out in EU Regulation 80/2009 on a code of conduct for computerised reservation systems, which has been implemented in Malta through the enactment of the Code of Conduct for Computerised Reservation Systems Act. The act established the Computerised Reservation Systems Board, which has the power to impose penalties of up to 10% of the annual turnover for the activity that led to the infringement on:

  • system vendors;
  • parent carriers;
  • participating carriers; and
  • subscribers.

Cargo

What rules and liabilities apply to the air carriage of cargo?

Malta has ratified the Montreal Convention for the Unification of Certain Rules for International Carriage by Air, which governs the rules relating to the carriage of cargo by air. Under this convention, in the case of destruction, loss, damage or delay, the air carrier is liable to pay up to 19 SDR per kilogram. However, if the arrival or departure country has not ratified the Montreal Convention, the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air, as amended by the Hague Protocol, applies.

Marketing and advertising

Do any special rules apply to the marketing and advertising of aviation services?

No.    

Complaints handling

Do any special rules apply to consumer complaints handling in the aviation industry?

EU Regulation 261/2004 mandates EU member states with designated national enforcement bodies and includes a complaint form for denied boarding, downgrading or a cancellation or long delay. In Malta, this complaint form can be accessed from and filed with the Competition and Consumer Affairs Authority.

Aircraft

Aircraft register

What are the requirements for entry in the domestic aircraft register?

In order to be eligible to register aircraft in Malta, the applicant must be:

  • the government;
  • a citizen of Malta, an EU or EEA member state or Switzerland;
  • an undertaking formed and existing in accordance with the laws of Malta, an EU or EEA member state or Switzerland; or
  • a citizen of, or an undertaking established in, a qualified jurisdiction.

Further, an eligible applicant must be:

  • the owner and operator of the aircraft;
  • the owner of an aircraft that is under construction or temporarily not being operated or managed;
  • the operator of an aircraft that is under a temporary title which satisfies the prescribed conditions; or
  • the buyer of an aircraft under a conditional sale, title reservation or similar agreement which satisfies the prescribed conditions, who is authorised thereunder to operate the aircraft.

Mortgages and encumbrances

Is there a domestic register for aircraft mortgages, encumbrances and other interests? If so, what are the requirements and legal effects of registration?

Aircraft mortgages are registered in the National Aircraft Register in the order in which they are received. A mortgage is easily registered by submitting a copy of the mortgage deed and an application form with the Civil Aviation Directorate (CAD). Malta has also ratified the Cape Town Convention on International Interests in Mobile Equipment; therefore, international interests may be recorded in the International Registry.

Registered mortgages rank according to the date and time of the registration. International interests rank before locally registered mortgages. Both registered mortgages and international interests rank after special privileges and possessory liens that are granted ipso jure – for example, over:

  • judicial costs;
  • fees due to the CAD;
  • unpaid wages; and
  • fees due to an aircraft repairer or manufacturer.

The principal advantages of mortgage registration are:

  • registered mortgages constitute an executive title and may therefore be enforced without first having recourse to a court;
  • a clause may be inserted in the mortgage deed prohibiting further mortgages and the transfer of ownership of the vessel without the prior consent of the mortgagee. Such a prohibition will be noted in the National Aircraft Register and the CAD will thereby refuse to register any further mortgages unless the holder of a prior mortgage consents in writing; and
  • registered mortgages attach not only to the aircraft itself, but also to any proceeds from indemnity or insurance.

In the event of default, the mortgagee is entitled to:

  • take possession of the aircraft for which the mortgagee is registered or a share therein;
  • sell the aircraft for which the mortgagee is registered or a share therein;
  • apply for an extension, pay fees, receive certificates and generally do all such things in the name of the owner or registrant as may be required in order to maintain the status and validity of the aircraft registration;
  • lease the aircraft so as to generate income therefrom; and
  • receive any payment of the price, lease payments and any other income which may be generated from the aircraft’s management.

Detention

What rules and procedures govern the detention of aircraft?

Aircraft detention may be obtained for unpaid debts principally through two warrants:

  • Executive warrant of arrest – such a warrant may be filed by a creditor that has an executive title against the aircraft or the company owning or operating the aircraft. Pursuant to this warrant, the aircraft will be seized and Transport Malta will assume supervision of it. Once this warrant has been filed, the Maltese courts will fix a period for payment of the debt. If the debt remains unpaid after this period, the courts will order the sale of the aircraft by auction or approved private sale.
  • Precautionary warrant of arrest – this warrant may be filed if the applicant proves that the departure of the aircraft may frustrate its claim for debts over said aircraft. The warrant will seize the aircraft and put it under the supervision of Transport Malta and the applicant will be given a period in which to institute a lawsuit. After the lawsuit becomes res judicata, the precautionary warrant will remain in force for another 15 days, after which the precautionary warrant will be converted into an executive warrant.

Safety and maintenance

What rules and procedures govern aircraft safety and maintenance?

Pursuant to EU Regulation 1008/2008 on common rules for the operation of air services, the Civil Aviation (Air Operators Certificates) Act requires air carriers to obtain an air operators certificate (AOC) from the CAD. 

The CAD will grant an AOC only if it is satisfied that the air carrier is competent, having particular regard to:

  • its previous conduct and experience; and
  • its equipment, organisation, staffing, maintenance and other arrangements to secure the safe operation of its aircraft.

In determining the carrier’s competency to operate aircraft, the CAD will take into account its capability of meeting the applicable safety requirements, according to law.

The certificate will remain valid for one year in order to ensure that the safety standards are met from each year.

Further, the monitoring of safety standards and the safety requirements issued by the European Aviation Safety Agency apply.  

Drones

What is the state of regulation on unmanned aerial vehicles (drones) in your jurisdiction?

At present, no EU-wide or local laws govern the use of drones. However, the CAD issues permits for drone operations. The authority has adopted a risk-based approach on a case-by-case basis depending on the scope and complexity of a permit request and the risk of such an operation.

Accidents

Investigation

How are air accidents investigated in your jurisdiction?

Investigations are carried out by the Bureau of Air Accident Investigation (BAAI) under the Civil Aviation (Investigation of Air Accidents and Incidents) Regulations. The BAAI is granted broad investigatory powers, including:

  • unhampered access to:
    • the site of an accident or incident;
    • aircraft, their contents and wreckage; and
    • any building in which there is an object to be examined;
  • the power to request medical examinations and autopsies;
  • the power to call and examine witnesses; and
  • free access to all records concerning an aircraft’s owner.

However, the BAAI has no power to apportion blame or liability.

Liability

What liability regime governs death, injury and loss arising from air accidents?

Malta applies the liability rules of:

  • the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air;
  • the Montreal Convention for the Unification of Certain Rules for International Carriage by Air; and
  • EU Regulation 889/2002 on air carrier liability in the event of accidents, insofar as it applies to intra-EU accidents.

Regulatory notification

What are the reporting requirements for air accidents?

Under the Civil Aviation (Investigation of Air Accidents and Incidents) Regulations, where an accident or serious incident occurs on or adjacent to an aerodrome occurs in or over Malta – or outside Malta, but the aircraft is registered in Malta or operated by an operator established in Malta – the pilot in command or, if he or she is incapacitated, the operator of the aircraft must notify:

  • the BAAI by the quickest means of communication possible;
  • the national police, in the case of an accident in Malta; and
  • the Civil Aviation Directorate.

The notification provided to the BAAI must include the following information:

  • in the case of an accident, the identifying abbreviation ‘ACCID’ or, in the case of a serious incident, ‘INCID’;
  • the aircraft’s type, model, nationality and registration marks;
  • the name of the aircraft’s owner, operator and hirer (if any);
  • the name of the aircraft’s commander;
  • the date and coordinated universal time of the accident or serious incident;
  • the aircraft’s last point of departure and next point of intended landing;
  • the position of the aircraft by reference to an easily defined geographical point and latitude and longitude; and
  • the number of crew members and passengers on board the aircraft at the time of the accident or serious incident and, in the case of an accident, the number of those killed or seriously injured as a result of the accident;
  • the number of other persons killed or seriously injured elsewhere than on the aircraft as a result of the accident or serious incident;
  • the nature of the accident or serious incident and the extent of the damage to the aircraft as far as is known;
  • the physical characteristics of the area of the accident or serious incident, including an indication of access difficulties or special requirements to reach the site;
  • the presence and description of dangerous goods on board the aircraft, if any; and
  • the identification of the person sending the notice.

Airports

Ownership

What rules govern the ownership of airports (both public and private)?

No specific rules govern the ownership of airports, as the need to regulate has never arisen in this area. Malta has only one airport, which the government owned and operated until 2002. Although the airport is now privatised, it is not owned or operated by an air operator.

Operation

What is the authorisation procedure for the operation of airports?

Licensing for the operation of airports is regulated by the Civil Aviation (Aerodrome Licensing) Regulations, under which an operator must obtain a licence. The applicant for an aerodrome licence must submit to the Civil Aviation Directorate (CAD) an aerodrome manual and amendments thereto as may be required on occasion. The aerodrome manual must comprise five parts and:

  • be typed or printed and signed by the aerodrome operator;
  • be in a format that is easy to revise;
  • have a system for recording the currency of pages and amendments thereto, including a page for logging revisions; and
  • be organised in a manner that facilitates the preparation, review, acceptance and approval process.

What ongoing operating requirements apply (including obligations relating to safety, security and facilities maintenance)?

The operator of an aerodrome used for public transport purposes must comply with the Standards and Recommended Practices – Volume 1, which lists design and operations specifications for airports, and Volume 2, which lists design specifications for heliports, as well as Annex 14 to the Chicago Convention on International Civil Aviation.

Airport charges

What airport charges apply and how are they regulated?

The Airport Economic Regulations established the Airport Charges Regulatory Board, which is responsible for the determination, review and regulation of airport charges, as well as the quality of service provided. The board comprises:

  • a chair, appointed by the minister for transport, infrastructure and capital projects;
  • one CAD representative;
  • one representative from the airport users committee; and
  • one airport operator representative.

The following charges apply:

  • landing charges;
  • night surcharges;
  • aircraft parking charges;
  • passenger service charges;
  • security fees; and
  • charges for passengers with reduced mobility.

Access

What regulations govern access to airports?

In general, anyone can enter an airport. However, the Airports and Civil Aviation (Security) Act requires individuals to possess a written security pass or temporary authorisation issued by the manager of airport security in order to access restricted areas.

Slot allocation

What regime governs the allocation of airport slots (including slot transfer, revocation and disputes)?

Under the Allocation of Slots at Airport Regulations, the allocation of airport slots is the sole responsibility and discretion of a scheduling coordinator who is appointed by the airport operator on the CAD’s approval. However, the scheduling coordinator must:

  • act in an independent, neutral, non-discriminatory and transparent manner;
  • ensure that the air carriers’ requirements are met;
  • ensure that aircraft, passengers, cargo and mail are handled in the most efficient and expeditious manner;
  • monitor the use of slots; and
  • participate in scheduling conferences of air carriers or their representative international organisations, as appropriate.

Ground handling

How are ground handling services regulated?

Ground handling services are regulated by the Airport (Ground Handling Services) Regulations, which implement EU Directive 96/67/EC on access to the ground handling market at EU airports. Under the regulations, airports must ensure that suppliers of ground handling services established throughout the EU have free access to the market for the provision of ground handling services to third parties, subject to certain rules.

Competition issues

Governing regime

Do any sector-specific competition regulatory/legal provisions apply to the aviation industry in your jurisdiction?

No competition rules apply specifically to the aviation industry. The Competition Act, which largely implements Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) into Maltese law, applies.

Code sharing and joint ventures

What (if any) competition concerns arise in relation to code sharing and air carrier joint ventures?

Code-sharing agreements and joint ventures are not illegal per se, provided that they do not infringe general competition rules. The EU Merger Regulation (1008/2008), which regulates the operation of air services, provides that:

When operating intra-Community air services, a Community air carrier shall be permitted to combine air services and to enter into code share arrangements, without prejudice to the Community competition rules applicable to undertakings.”

Therefore, code-sharing agreements are legal insofar as they do not fall under the agreements prohibited by Article 101 of the TFEU – in particular, price-fixing agreements and agreements to share markets and sources of supply. Further, EU Regulation 139/2004 on merger control requires prior notification with an EU-wide prospect.

State aid

What rules govern state aid in the aviation industry? Do any exemptions apply?

No aviation-specific rules apply with respect to state aid. Articles 107 to 109 of the TFEU apply. However, EU Regulation 651/2014 declaring certain categories of aid compatible with the internal market exempts EU member states from seeking prior European Commission control for public investments in airports.

Notable cases

Have there been any notable recent cases or rulings involving competition in the aviation industry?

No.

Dispute resolution

Disputes

What aviation-related disputes typically arise in your jurisdiction and how are they usually resolved?

Litigation in the aviation sector often revolves around insurance claims and arrests of aircraft for unpaid debts. The arrest of aircraft is achieved by filing an application for a precautionary or executive warrant of arrest in the Civil Court. Therefore, given the nature of the disputes, recourse is usually sought from the courts.

Alternative dispute resolution methods, such as arbitration and mediation, could be considered depending on the nature of the dispute. Arbitration proceedings in Malta are regulated by the Arbitration Act, which incorporates a number of international conventions, including the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration. Arbitration in Malta falls under the auspices of the Malta Arbitration Centre. As regards mediation, the Mediation Act contemplates this method of dispute resolution only for disputes involving civil, family, social, commercial or industrial matters.